Dell Technologies Inc Ordinary Shares - Class C
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$773.00 | Tgmh | Cwblstnh |
Strong AI Server Sales Raise Our Valuation for Dell but the Stock Remains Severely Overvalued
Business Strategy and Outlook
Dell Technologies is a large provider of enterprise hardware. Dell holds top market shares across its businesses, but these are predominantly commoditized, cyclical, and price-competitive markets that, in our view, don’t endow a leader like Dell with an economic moat. We forecast Dell to see no more than modest top line growth into the medium- and long-term, and see little opportunity for material and durable margin expansion. Dell’s strong suit is its robust free cash flow generation, both in absolute terms and as a share of its net income. We are pleased with the company’s newfound focus on shareholder returns as a prioritized use of this heady cash flow.